Indian share market has been bleeding after the outbreak of Coronavirus in China and its spread across other continents. The market has plunged around 10 per cent since then. As there is no immediate relief visible from the Coronavirus, global markets are expected to continue to suffer. In such a situation, HDFC Bank is looking promising and it can give near 10 per cent returns in just one to three months, depending upon the time it takes for the Coronavirus to subside.
According to the stock market experts, HDFC Bank share price is expected to hit Rs 1,296 per stock levels in one to six months’ time. Currently, the HDFC Bank share price is oscillating around Rs 1,170 per stock levels. In the last one month, HDFC Bank shares made a high of Rs 1,249 and then got hit by the Coronavirus spread. Now, HDFC Bank is trading at its lowest monthly levels, which makes it a strong buy for the portfolio stock investors, say experts.
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Speaking on the HDFC Bank shares fundamentals, a detailed Axis Securities report says, “Over the past 10 years, HDFC Bank has steadily grown its loans market share to around 8.5 per cent of the system, driven by steady branch addition, improving employee productivity, and effective use of technology to gain distribution efficiency. In the wholesale loan segment, deepening client relationships and a greater share of wallets will help in further market share improvement, as clients look to consolidate their relationships to a few banks. HDFC Bank also gains market share. Within retail loans, HDFCB has been institutionalizing the sales process so as to increase the pace of customer acquisition. In Q3FY20, Advances growth came in healthy at 20 per cent YoY to Rs 9,36,030 crore.”
The Axis Securities report went on to add that HDFC Bank has maintained a largely stable asset quality with GNPAs between 0.9 per cent to 1.4 per cent over FY15-FY19. In Q3FY20, GNPAs continued to remain steady at 1.42 per cent. A majority of HDFCB’s customers in unsecured retail loans belong to the salaried segment. Contrary to expectations, there have not been any major lay-offs or job losses in the economy and has not significantly impacted the segment. Incremental growth is being driven by deepening penetration in the salaried segment. HDFCB also has a high proportion of loans to existing customers, especially in credit cards and Personal loans. On its advice to the share market investors in regard to HDFC Bank shares the Axis Securities report says that one can buy the Bank Nifty counter for 10 per cent upside target.
Rohit Singre, Senior Technical Research Analyst, LKP Securities said, “Due to the Coronavirus outbreak, some of the good quality stocks have got hit and HDFC Bank is one of them. It is one of the most lucrative shares to buy as it will shoot up very sharply once the Coronavirus impact goes down. In my opinion, one should buy HDFC at current levels and keep on adding till it sustains above Rs 1,100 levels.”
He advised market investors to maintain the stop loss at Rs 1,100 while taking a buy position in the HDFC Bank scrip.